Best GAP Insurance Coverage Company (2024)

The Highlights

• Guaranteed asset protection (GAP) insurance pays the difference between the value of the cars and what is owed on the loans if the vehicle is totaled.
• GAP insurance can be purchased from car dealers or through your auto insurance company.
• Stand-alone GAP insurance is usually more expensive than adding it to your existing auto insurance policy.
• If you have a good driving record, GAP insurance may be able to lower your premiums.
• You can also purchase GAP insurance after the fact. This type of coverage is often referred to as retroactive GAP insurance.

The best companies are usually companies with the highest market share in the insurance industry. While choosing the best insurance isn’t always easy, reviews can get you on the right track.

What is GAP insurance?

GAP is an acronym that stands for guaranteed asset protection. GAP insurance provides insurance that helps cover the difference between what cars are worth and what is still owed on loans. A GAP policy is available as an add-on to your insurance policy.

Often, the best GAP insurance companies cannot compete with standard car insurance providers and loan lenders when it comes to affordability.

Not all of the best insurance companies offer this type of coverage, however.

Whether you’re buying a new or used car, read our guide to learn why you should add GAP coverage to your policy. It could help you save thousands. Continue reading to learn where you can buy many types of coverage options.

To find out who offers the best GAP insurance coverage rates for your financed vehicle, enter your ZIP code into our free tool above to compare GAP car insurance quotes.

How Does GAP Insurance Work?

Before we tackle specific questions like does Progressive’s auto insurance include GAP insurance, you might be wondering, what is GAP coverage? How does GAP coverage work? And when should you purchase GAP coverage?

This additional policy pays the difference between the actual cash value of your car and your outstanding loan balance in the event of a total loss when you have negative equity at the time of the accident.

GAP insurance is a good idea if you owe more on a car loan than the car is actually worth, which is what negative equity means.

Since insurance companies only pay the actual cash value for your totaled vehicle when making payment of a claim, you may find yourself owing thousands of dollars to your lender. GAP insurance prevents that from happening.

Sometimes when you purchase a new car, a quote is offered by dealers. If you choose this route, otherwise known as a stand-alone policy, know that you’ll pay interest on the coverage as you make the loan payments.

Lease gap insurance is available if you lease a vehicle. Lease gap coverage pays the difference between the actual cash value of your vehicle and the unpaid lease balance on your lease if your vehicle is totaled due to a loss covered by your comprehensive or collision insurance.

But what about  Progressive vs State Farm car insurance GAP policies? Or any other major auto insurers? Fortunately, you can also purchase this coverage from a car insurance carrier. Major car insurance companies that offer GAP coverage include most nationwide companies, as well as some local agencies. Keep reading to see who we recommend.

Do I Need GAP Insurance?

You’ve come to the right place for expert advice. This insurance product is a good idea if you’ll ever owe more on your vehicle than it’s worth.

For example, say you buy a brand-new car for $30,000 and put down $1,000. Now imagine that car is totaled a month after you buy it before you even begin to make your monthly payments Your insurance claims department will only pay the actual cash value of your vehicle, which is different from what you financed for your new car.

Take a look at the table below to see approximately how your current auto insurer calculates the actual cash value of your vehicle.

Auto Insurance Company Calculation for the Actual Cash Value of a New Car

New cars depreciate by about 11% right after purchase. Your $30,000 car is now only worth $26,300, and you’ve only made one payment.

Since your car insurance company only pays the actual cash value for your totaled vehicle, you’ll still have a $2,700 outstanding balance on your loan terms at the time of loss for a car that is no longer drivable. Your GAP auto insurance coverage will cover that difference, so you don’t have to pay out of pocket.

If you own your car outright, or if you owe less on your loan than the actual cash value of the vehicle, you do not need a GAP policy.

Fortunately, if you do require this optional coverage, there are many expert auto GAP protection options available for you. You may be asking, does Progressive sell GAP policies? What about other companies? Does State Farm have it?

It’s possible to secure very cheap rates for coverage, but you have to know where to look. Keep reading to learn the best place to get GAP coverage.

How Much is GAP Insurance?

You can have this added to your primary auto insurance policy. If you go this route, you will pay about $60 more a year.

You can also purchase it from your dealer when you buy your vehicle. This will cost you around $600 a year and will usually be rolled into the cost of your loan. This means that you will be paying interest for your coverage. It doesn’t make financial sense to spend so much extra through your dealer.

You can also purchase just a GAP insurance policy, but that will also cost you several hundred dollars.

Since insurance companies only pay the actual cash value for your totaled vehicle when making payment of a claim, you may find yourself owing thousands of dollars to your lender. GAP insurance prevents that from happening.

Sometimes when you purchase a new car, a quote is offered by dealers. If you choose this route, otherwise known as a stand-alone policy, know that you’ll pay interest on the coverage as you make the loan payments.

Lease gap insurance is available if you lease a vehicle. Lease gap coverage pays the difference between the actual cash value of your vehicle and the unpaid balance on your lease if your vehicle is totaled due to a loss covered by your comprehensive or collision insurance.

But does State Farm or Progressive auto insurance offer a GAP auto policy? Or any other major auto insurers? Fortunately, you can also purchase this coverage from a car insurance carrier.

Can I Buy Stand-alone GAP Insurance?

First of all, what is stand-alone GAP insurance? If you purchase it from a company and nothing else, that’s considered a stand-alone policy.

If you’re wondering who sells stand-alone coverage, it depends on where you live. A quick internet search will help you locate local agencies that offer this service. How do you know if they’re any good? It’s easy; reviews will help you decide.

For example, larger national companies, like Gap Direct, do provide stand-alone policies. But Gap Direct reviews are low. Perform a price comparison and look at consumer reviews before choosing.

If it’s not easy to access a company’s number, that company probably isn’t the best resource.

While stand-alone coverage exists, it’s usually not the most affordable option. We were unable to find a single company that had a reputation solid enough to meet our standards.

Remember, you’re looking for the best car GAP insurance, which may or may not be a stand-alone policy. A new car insurance quote from the dealer will never be the best option. Stand-alone providers offer you similarly bad deals.

Commonly, the fee you pay for stand-alone GAP coverage is more than what your car insurance company would charge you if you added it to your policy.

Similarly, your loan provider will also usually charge a lower rate than what you’ll receive from a stand-alone company. For this reason, we highly recommend you compare quotes. Car insurance company comparisons will save you money and prevent future stress.

As a result, our recommendations for the best coverage focus on top companies that will require you to use them as your insurance provider or as your lender.

How Can you Choose the Best Company for GAP Car Insurance?

What are the best-rated companies?

To answer the question, “What insurance companies offer GAP coverage?” The answer is: Almost all major commercial companies provide this service. Your loan provider and car dealership also offer this coverage.

Before purchasing Progressive or State Farm Insurance, we recommend checking with your provider and lender to make sure it’s not already part of your policy.

Many car insurance companies offer stand-alone GAP coverage, but it’s only available if you purchase an insurance policy with that company. Some companies offer it only if you finance through them.

Check out our top three recommendations for the best companies that offer GAP insurance, and read reviews of the top companies below.

Does Progressive Sell GAP Insurance?

Progressive’s insurance reputation is stellar; not only are they affordable, but they provide coverage across the country. So can you get coverage through Progressive? Fortunately, the answer is yes.

Otherwise known as Progressive loan/lease payoff insurance, Progressive Insurance has affordable GAP insurance policies. Another benefit to the loan/lease payoff coverage from Progressive? Progressive’s option is also relatively good. Read our Progressive insurance review to learn more.

If you’re ever unhappy with the Progressive new car replacement program, there’s a place to submit Progressive Insurance total loss complaints on the company’s website.

Believe it or not, Progressive offers this type of insurance for just five additional dollars per month. Are you wondering how to add it with Progressive? Choose to add the Progressive loan/lease payoff coverage to your policy, or work directly with one of the company’s insurance agents.

The loan/lease payoff coverage through Progressive pays up to 25% above the actual cash value of your vehicle in the event of a total loss. But how does Progressive determine actual cash value? They calculate your vehicle’s depreciation, similar to the scenario above.

While it’s not a guaranteed payoff of your loan amount, it is a reliable protection for a great price. This option makes buying a new car after total loss with Progressive Insurance much less of a financial burden.

Does Progressive provide auto loans? While you’ll find Progressive money loan reviews online, they are for personal loans only.

Progressive Insurance car loans exist, but the only way to access Progressive is by buying an insurance policy from the company directly.

If affordability is your goal, Progressive is perfect for you. You can see more details and specifics at Progressive insurance review & complaints: auto insurance.

However, if you want more comprehensive replacement coverage included in your loan, you’ll have to look elsewhere.

Does AAA Sell GAP Insurance?

Does AAA offer it? Yes, they do, but unlike Progressive, you can choose to buy GAP coverage through AAA’s auto financing department, or as an insurance policyholder, but this varies by state. AAA car insurance is affordable as well.

You can also choose a new car added protection endorsement; AAA offers this add-on to policyholders with comprehensive coverage.

If you choose to finance your vehicle through AAA, you can be covered without having to switch insurance companies. Fortunately, AAA auto loan reviews are excellent.

The AAA quote is an average flat rate of $395, as listed on the AAA website. While the price is not as low as Progressive’s rates, the coverage is still substantial, and you don’t have to use AAA as your insurance provider.

However, you must be a member to purchase AAA insurance coverage, and that comes with an additional fee.

While the AAA membership comes with a lot of benefits and the AAA car loan reviews are mostly positive, this option is not the most budget-friendly.

That being said, AAA auto protection reviews are good, with high customer satisfaction rates. Paying more upfront for a better customer experience might be worth your while if it fits your budget.

More details are available at AAA Auto Insurance Review & Complaints: Auto, Home, Life, Travel & Wedding Insurance.

Does State Farm Sell GAP Insurance?

The biggest car insurance company in America is State Farm. Does State Farm offer it? Yes, it does. State Farm’s GAP option is also known as payoff protector car insurance. You can purchase the State Farm payoff protector in two ways.

Does State Farm offer auto loans like AAA? The good news is it does have an auto lending service. However, unlike AAA, the payoff protector is included in your State Farm Bank auto loan rates.

If you choose State Farm lending for car loan purposes, you’ll be a happy customer. You can easily access your State Farm auto loan payoff amount at any time through your account or by calling the State Farm payoff number.

The State Farm auto payoff number can be found on the company’s website.

State Farm bank dealer services are straightforward and easy to navigate on their website. There you can find not only the State Farm bank payoff number but also the State Farm bank payoff address.

State Farm car insurance reviews are comparable to AAA. How much is coverage from State Farm? Because State Farm GAP converge is included for loan customers even if they don’t insure with State Farm, it’s difficult to answer that question.

Okay, but can I buy it from State Farm as a car insurance customer? Yes, State Farm does provide it as an additional coverage option. Just ask for a State Farm payoff quote.

Like other companies, the State Farm insurance totaled vehicle process only pays the actual cash value of your car. Opting to add State Farm’s option will help cover what you still owe on your loan.

State Farm might not be the least expensive option, but the company has a great reputation. This may be why more people insure with them than any other company in the country.

Easy access to things like the State Farm car loan payoff number for consumers indicates that this is a reliable company.

Unlike AAA, you do not need to pay a membership fee to use State Farm’s services, making this company a competitive option. See more details at State Farm Insurance Review.

There are other auto providers besides State Farm, AAA, and Progressive. Ultimately, the best car insurance with GAP coverage could be different for everyone.

Are you Shopping for GAP Car Insurance?

While Progressive, AAA, and State Farm are our three top companies, you might secure cheaper rates with another company. Therefore, we recommend comparison shopping to see which company offers GAP coverage that best fits your individual needs.

Some car insurance companies will adjust rates based on your credit score.

Pay attention to the GAP car insurance reviews from other customers to ensure the company you choose will be compatible with you. While there are plenty of insurance companies offering it, the cheapest GAP car insurance quotes aren’t always the best options.

Remember, good companies should not cost you an arm and a leg. A car dealership may try to convince you to roll it into your loan, but this will be expensive, and most financial experts recommend against it.

Not only will you pay a high flat-rate amount for the coverage, but you’ll also pay interest if you roll it into the loan.

The absolute best way to buy it is to shop around. Several companies offer this coverage either as an add-on or as part of specific policies. Your odds of finding a great deal on your car insurance overall are pretty good.

If changing car insurance companies is not something that interests you, the next thing to consider is refinancing your loan. You can add it later if you need to, but it’s best to buy it at the time that you take out the loan.

A lot of lenders offer this coverage besides AAA and State Farm, including many credit unions. Just make sure you’re not taking a higher interest rate in return for coverage, as that will cost you more in the long run. This is not something you need forever. Once you no longer owe more for your loan than your vehicle is worth, you no longer require the coverage.

Are you looking to buy GAP coverage? Compare cheap GAP car insurance quotes from car insurance companies with affordable policies by entering your ZIP code into our free tool below.

Read more: Best Texas GAP Insurance Coverage

Case Studies: Real-World Scenarios on GAP Insurance Coverage

Case Study 1: State Farm GAP Insurance Coverage

John purchased a brand-new car and opted for GAP insurance coverage from State Farm. Unfortunately, his car was totaled a month after purchase, and the actual cash value offered by his insurance company fell short of what he owed on his loan. State Farm’s GAP insurance policy covered the difference, saving John from significant out-of-pocket expenses.

Case Study 2: Stand-Alone GAP Insurance Policy

Sarah decided to buy a stand-alone GAP insurance policy from a local agency. She conducted thorough research and read positive reviews before choosing the company. When her leased vehicle was totaled, the stand-alone GAP insurance policy covered the difference between the actual cash value and the unpaid lease balance, ensuring she didn’t have to bear the financial burden.

Case Study 3: Affordable GAP Insurance Rates

Mark wanted to add GAP insurance coverage to his existing car insurance policy without breaking the bank. He compared quotes from multiple insurance companies using a free online quote tool. After careful evaluation, he found an insurance provider offering affordable GAP insurance rates as an add-on to his policy, providing him with the necessary coverage at a reasonable price.